At a Glance
Eureka Forbes is that household name you know from water purifier ads, but on the stock market, it’s playing a different game. Market cap ₹11,065 Cr, P/E ~69×, PB ~2.5×, ROE just 3.7%. Net profit ₹163 Cr on revenue ₹2,436 Cr (FY25). Promoters have pledged 53.7% of their stake—because why not add spice to investor anxiety? Stock trades high, margins modest, and growth looks good—if you believe in clean water and clean profits.
Introduction
From “Jal hi Jeevan hai” to “Valuation hi Jeevan hai”, Eureka Forbes has transitioned from selling water purifiers to selling hope on Dalal Street. Under Advent’s ownership, the company restructured, cut debt, and posted stellar growth. But at P/E 69, you’re paying a premium that could purify Ganga. This article filters the hype, checks for impurities, and tells you whether this stock is drinkable—or toxic.
Business Model (WTF Do They Even Do?)
Eureka Forbes thrives in health & hygiene appliances—water purifiers (Aquaguard), vacuum cleaners, air purifiers, and home security products. Recurring demand + brand trust = steady sales. However, competition from Kent, Livpure, Xiaomi (robotic cleaners), etc., keeps pricing tight. Recent partnerships, like with Dixon for robotic vacuums, show they’re innovating. Roast: they’re cleaning your house but dirtying their P&L with low ROE.
Financials Overview
- Revenue FY25: ₹2,436 Cr
- Net Profit: ₹163 Cr
- EPS: ₹8.4
- Market Cap: ₹11,065 Cr
- P/E: 69×
- ROE/ROCE: 3.7% / 5%
- Debt: negligible (post restructuring)
Growth is strong (profit CAGR 183% in 5Y) but from a low base. Margins improving (OPM 11% FY25). Still, returns remain tepid.
Valuation
- P/E Approach
Consumer durables peers average ~40×. EPS ₹8.4 → fair price ₹340. - EV/EBITDA
EBITDA FY25 ~₹263 Cr; EV/EBITDA ~15× → EV ₹3,945 Cr → market cap ~₹4,000 Cr → per share ₹200. - DCF/Relative
Aggressive assumptions: ₹400–₹450/share.
Fair Value Range: ₹200–₹400 vs. current ₹572. Valuation: premium by 40–150%.
What’s Cooking – News, Triggers, Drama
- Partnership with Dixon (July 2025) for robotic vacuums.
- Debt reduction: now almost debt-free, credit rating upgraded.
- Litigation: ongoing stamp duty dispute (₹12.6 Cr), minor but worth noting.
- Promoter stake pledge: 53.7% encumbered—serious governance red flag.
Balance Sheet
| Item | ₹ Cr |
|---|---|
| Total Assets | 6,310 |
| Equity | 4,384 |
| Borrowings | 26 |
| Other Liabilities | 1,899 |
Auditor quip: Balance sheet’s clean like Aquaguard water, but those pledged shares are like rust in the pipes.
Cash Flow – Sab Number Game Hai
| Year | Operating | Investing | Financing | Net Cash |
|---|---|---|---|---|
| 2023 | 171 Cr | –22 Cr | –150 Cr | –1 Cr |
| 2024 | 195 Cr | –35 Cr | –117 Cr | +43 Cr |
| 2025 | 226 Cr | –168 Cr | –43 Cr | +14 Cr |
Operating cash flow is improving steadily, financing outflows dropping—healthy signs.
Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROE | 3.7% |
| ROCE | 5% |
| P/E | 69× |
| PAT Margin | 7% |
| D/E | 0.01 |
Stand-up line: These ratios are the financial version of “before” pictures in a fitness ad—plenty of room to flex, but not there yet.
P&L Breakdown – Show Me the Money
| Year | Revenue | EBITDA | PAT |
|---|---|---|---|
| 2023 | 2,189 Cr | 192 Cr | 92 Cr |
| 2024 | 2,436 Cr | 263 Cr | 163 Cr |
| 2025 | 2,436 Cr | 263 Cr | 163 Cr |
Margins up, profits tripled in 2 years, but growth in FY25 stagnated.
Peer Comparison
| Peer | Revenue | PAT | P/E |
|---|---|---|---|
| Voltas | 15,413 Cr | 823 Cr | 53× |
| Blue Star | 11,968 Cr | 585 Cr | 60× |
| Amber Ent. | 11,021 Cr | 275 Cr | 97× |
| Eureka Forbes | 2,436 Cr | 163 Cr | 69× |
Peers deliver better returns at similar or lower P/E.
Miscellaneous – Shareholding, Promoters
Promoter holding stable at 62.5% but 53.7% pledged. FIIs up to 14%, DIIs ~6%, public 16%.
Promoter roast: Advent owns the ship, but with half the cargo pledged, storms can hurt.
EduInvesting Verdict™
Eureka Forbes is finally cleaning up its financial mess—debt gone, profits up, margins improving. But the market already priced in this turnaround, trading at a rich P/E of 69× despite ROE under 4%. Add promoter pledges, stagnant revenue growth, and litigation noise—risk is high.
SWOT Snapshot:
- Strengths: Strong brand, debt-free, improving cash flows.
- Weaknesses: Low ROE, pledged shares, sluggish topline growth.
- Opportunities: New products (robotic cleaners), domestic demand, premium appliances.
- Threats: Competition, governance risks, market overvaluation.
Conclusion: Eureka Forbes is a great brand story but not yet a great stock story. Unless margins skyrocket and pledged shares drop, this looks like paying premium for filtered water—good, but overpriced.
Written by EduInvesting Team | August 1, 2025
SEO Tags: Eureka Forbes, Aquaguard stock, consumer durables India, high P/E stocks, stock analysis
